Opening your own salon is one of the biggest decisions you’ll make in your beauty career. However, when it comes to owning a salon, you may not want to own every aspect of the business. The costs associated with starting a business are high, and you may not know where to turn if you need help. When you lease, there are lower start-up costs, lower maintenance costs, lease flexibility, and in some cases, the ability to share resources.
You are still your own boss while leasing a salon space. Some suite rentals also provide supportive amenities that make running your business easier, so you can focus more on your clients and building your brand. Whether you’re a hairstylist, makeup artist, or other professional in the beauty industry, this article can benefit you. Let’s take a look at the information you need to make an informed decision about leasing a salon space and how to maximize the experience.
Factors to Consider When Leasing Salon Space
When leasing, you want to know all the specifics of your lease and know your rights as a tenant. No question is too small, and no question is too silly. If you’re going to rent, it’s within your rights to ask any and every question you feel needs answered so you can iron out the details before you sign a lease.
What is a Lease Agreement?
A lease agreement is a legal contract between two parties: the property owner and the party that wants to pay to use a space for a designated amount of time. The lease agreement specifies the rights and obligations of both parties, such as the rent amount, the duration, and the conditions of the property.
Essential Elements of a Lease Agreement
The terms of your lease are very important to your business. A lease agreement should include the following information:
- Date of the agreement
- Name and address of the salon + unit number you will be renting
- First and last name of the owner/company (lessor)
- First and last name of the renter/s (lessee/s)
- Start and end date + total length of agreement
- Rental rate
- Rent due date and payment frequency (daily, weekly, monthly, etc.)
- Amount of security deposit (if included)
- Penalties for late/insufficient payments
- Details of the space, equipment, and other resources included in the rent
- What the studio rental will be used for, and any restrictions
- Terms of lease termination
- Rules to adhere to during occupancy
- Permits/licenses, tax, and insurance obligations
- Signatures of both parties
- Signed date of the rental agreement
Make sure you read and understand the lease agreement before signing it. If you have any questions or concerns, ask the property owner for clarification.
Benefits of Leasing Salon Space
When considering whether to purchase or lease a salon space, it’s essential to think about how each one will benefit you as a business owner. Here are a few ways leasing a salon space will work to your benefit.
Lower Start-Up Cost
When leasing a salon space, it requires less up-front capital than owning a storefront salon — beneficial for anyone starting out.
Lower Maintenance Costs
You rent the space, which means you don’t have to spend extra money on repairs and maintenance on the building. Your time and money are spent only on your business.
Lease Flexibility
Leasing gives you more flexible terms to customize your space. You can create your own unique environment and brand.
Shared Salon Suite Rental
You can reduce your expenses by sharing your salon space with other beauty professionals. Sharing a salon suite with others can also allow you to have a much larger, luxurious environment for your clients. Think of the endless creativity you’ll experience by sharing with other beauty talents!
Important Aspects of the Lease Agreement
The lease agreement is where all of your legal and financial responsibilities will be documented. Knowing the difference between a good and bad agreement will help protect you from future issues. Here are six important aspects to pay attention to.
Written Lease Agreement
A verbal lease agreement may hold up in some courts, but relying upon an oral agreement runs a high risk of dispute over the terms agreed to. A written lease agreement protects both parties involved by laying out the terms and conditions upfront — covering things like the cost of rent, what’s included in the rental rate, and the lease length.
Specifics in the Lease
Make sure your lease agreement is very specific. Any necessary alterations to the property should be documented. Do not use generic rental contracts. Make your leases specific to your business, location, condition of the space, and your industry. An apartment rental agreement is much different than a business agreement, so be sure the terms are specific to your case.
Security Deposit
A security deposit will protect against minor tenant damage to the property. They don’t protect against major damage, so you will also need insurance that should cover those costs if needed. They also do not protect against rent default or lawsuits. Make sure you read and understand your lease agreement concerning your security deposit.
Move-in Specials
Move-in specials are usually a one-time or limited-time offer. They are typically offered during the first month of your lease and when demand is low. A move-in special can sometimes include waived application fees, reduced or waived security deposit, first month rent-free (or discounted), and special deals on longer lease lengths. Any special offer upon move-in should be clearly documented in your agreement.
Breaking the Lease
If you choose to break your lease, expect to incur penalties. Landlord-tenant laws that allow you to break the lease are different from state to state. If you don’t have a legal reason to break the lease, your landlord may be allowed to impose a financial penalty. Be sure your agreement clearly states what happens if you break your lease and what you will be legally responsible for.
Costs Included in the Rental Rate
Some salon spaces may include costs such as maintenance, Wi-Fi, and utilities, in the rental rate.. These should be documented in your lease agreement. Clarify any other costs you may be responsible for (e.g. parking, laundry facilities, insurance) so you can find your total rental price.
Making the Most Out of Your Lease
Owning your own salon space is not only possible, but it’s also affordable. Salon Republic simplifies many aspects of running your own business so you can focus on your craft and your clients. Contact us today to learn how we can help you build your dream salon business.
